Updates, advisories and surprises

(4:43 PM ET) SAN FRANCISCO (MarketWatch) -- Berkshire Hathaway
BRK.A, -0.46%BRK.B, -0.20%
said late Friday that fourth-quarter net income came in at $2.95 billion, or $1,904 per class A share, down 18% from a year earlier when the insurance-focused conglomerate made $3.58 billion, or $2,323 per class A share. Operating earnings, which exclude realized gains and losses from investments and derivatives, came in at $2.35 billion, or $1,518 per class A share, the company reported.

Pepco profit rises on power delivery unit

(4:37 PM ET) SAN FRANCISCO (MarketWatch) -- Pepco Holdings Inc.
POM, +0.00%
said Friday that its fourth-quarter profit rose to $57.8 million, or 29 cents a share, from $36.3 million, or 19 cents a share, last year. Analysts surveyed by FactSet Research estimated a profit of 33 cents a share. Operating revenue rose to $2.33 billion from $1.9 billion in the year-ago period.

Wells says it lost $39 mln in money funds

(3:52 PM ET) NEW YORK (MarketWatch) -- Wells Fargo & Co.
WFC, -0.76%
said Friday that it took a $39 million loss in 2007 on debt held in one of its structured investment vehicles. It outlined the loss in an annual report filed with the U.S. Securities and Exchange Commission. Wells said the loss came as part of a $130 million capital support agreement Wells entered into as a way to safeguard a coveted Triple-A credit rating for many of its investment funds. The bank is currently the only one of the top five American banks to hold such a high credit ranking. The nation's fifth-largest bank added it had three separate SIVs worth more than $1 billion as of Feb.1.

Volkswagen annual profit climbs nearly 50%

(10:20 AM ET) LONDON (MarketWatch) -- Volkswagen Group(DE:766400), in an unplanned announcement, said annual profit rose nearly 50% to 4.12 billion euros ($6.2 billion), with revenue up 4% to 108.9 billion euros. The automaker said it recorded the highest profit before tax in the company's history, and is planning 1.80 euros a share dividend, up from 1.25 euros last year. Analysts polled by FactSet expected a profit of 3.89 billion euros on revenue of 109.7 billion euros, and a dividend of 1.59 euros per share. For 2008, the company expects growing sales, led by Asia-Pacific and Central and Eastern Europe regions, with growth in operating profit.

Grant Prideco Q4 earnings $1.00; merger seen closing April

(9:11 AM ET) NEW YORK (MarketWatch) -- Grant Prideco, Inc.
GRP, +0.95%
said Friday its fourth-quarter profit totaled $128.5 million, or $1.00 per share, from $140.1 million, or $1.07 per share, in the same quarter a year before. This was below the $1.09 average forecast of analysts polled by FactSet. Revenue for the quarter was $505.4 million, up from $452.2 million in last year's fourth quarter. Grant Prideco said its acquisition by National Oilwell Varco is expected to close in April.

Cassano, CEO of AIG's derivatives unit, to retire

(9:01 AM ET) SAN FRANCISCO (MarketWatch) -- Joe Cassano, chief executive of American International Group's
AIG, +0.72%
derivatives unit, will retire on March 31, Martin Sullivan, CEO of the giant insurer, said on Friday during a conference call with analysts. Bill Dooley will assume interim responsibility for the day-to-day operation of AIG Financial Products, along with his current duties, Sullivan added. Cassano will stay on as a consultant to AIG for the rest fo the year, while AIG looks for a new CEO for the derivatives unit. AIG reported a large quarterly loss late Thursday after taking more than $11 billion in charges related to the valuation of credit derivatives.

Armstrong World Industries' fourth-quarter net soars

(8:55 AM ET) NEW YORK (MarketWatch) -- Armstrong World Industries Inc.'s
AWI, -0.35%
fourth-quarter earnings soared to $19.6 million, or 34 cents a share, from $2.2 million, or 4 cents a share, a year earlier, boosted in part by higher selling prices. A Thomson Financial survey of analysts, on average, predicted earnings of 39 cents a share for the quarter. Analysts' estimates usually exclude items. The Lancaster, Pa., floor maker said sales increased to $852.4 million from $817.3 million a year ago. Armstrong also said it completed its strategic review. The company said due in part to current market conditions, it will continue to operate under its current structure. In addition, the company declared a special cash dividend of $4.50 a common share, payable March 31 to shareholders of record March 11. Looking forward, the company expects 2008 adjusted earnings of $2.30 to $2.90 a share on revenue of $3.5 billion to $3.65 billion. Armstrong sees first-quarter adjusted earnings of 30 cents to 35 cents a share. On Thursday, Armstrong shares closed down $1.06, or 3.1%, to $33.13.

New York Times January ad revenue falls 9.8% to $165 million

(8:48 AM ET) NEW YORK (MarketWatch) -- The New York Times Co.
NYT, -0.31%
said Friday its advertising revenue for January fell 9.8% to just under $165 million. Total revenue from continuing operations fell 5.5% on year, while circulation revenues increased 1.6%. The newspaper publisher said its Internet ad revenue grew 8.6% during the month. It also said it had the 10th largest presence on the Web, with 51.6 million unique visitors in the U.S. -- for an on-year growth of about 21% -- according to Nielsen Online.

FBR boosts price target on Southwestern Energy

(8:30 AM ET) NEW YORK (MarketWatch) -- Friedman Billings Ramsey on Friday raised its price target on Southwestern Energy Company
SWN, -0.56%
to $75 a share from $64 a share following the company's profit update. The move reflects FBR's higher net asset value for Southwestern. "With shale production continuing to grow, expectation of average initial production rates continuing to improve, and a good possibility of more strong initial production results in weekly...filings (given the increased use of seismic and longer laterals), we believe that the positive news flow will continue," FBR said.

Royal Bank of Canada posts lower first-quarter net

(8:12 AM ET) NEW YORK (MarketWatch) -- Royal Bank of Canada
RY, +0.00%
posted lower earnings in the fiscal first quarter, noting that although a few of its businesses were hurt by difficult market conditions, most performed well. The Canadian chartered bank credited its diversified business mix and "proactive approach to risk management" for the latest results. It said it had net income of C$1.245 billion, or 95 Canadian cents a share, in the first quarter, down from C$1.494 billion, or C$1.14 a share, a year earlier. The bank said its latest results reflect an after-tax writedown in Capital Markets of C$187 million and related compensation adjustments, higher impaired loans in U.S. banking over last year, and a C$45 million impact from strong appreciation of the Canadian dollar against the U.S. dollar. The year-earlier earnings were helped by a C$40 million adjustment related to reallocation of foreign investment capital, a C$25 million cumulative valuation adjustment related to prior periods, a C$14 million foreign-exchange translation gain on certain deposits and a tax reversal. Return on equity was 21.4% versus 27.3%, and the provision for credit losses rose to C$293 million from C$162 million.

Regency Energy fourth-quarter net falls 69%

(8:09 AM ET) NEW YORK (MarketWatch) -- Regency Energy Partners LP
RGNC
said fourth-quarter net income fell 69% to $2.04 million from $6.58 million a year earlier, due in part to the recent period's inclusion of $12 million in non-cash losses from risk-management activities. Results from the fourth quarter of 2006 included $1 million in non-cash gains from risk-management activities. On average, analysts polled by Thomson Financial expected earnings of 24 cents a share. The Dallas energy partnership said revenue increased 46% to $324.7 million from $221.8 million.

Tempur-Pedic CEO retiring this year

(7:41 AM ET) NEW YORK (MarketWatch) -- Tempur-Pedic International Inc.
TPX, -1.35%
on Friday said CEO H. Thomas Bryant, 60, plans to retire in the middle of this year. The Lexington, Ky. mattress maker said Bryant will serve as a director and stand for re-election at the annual meeting of stockholders in May.

Southern Union 2007 earnings $1.75 per share vs 40 cents

(7:23 AM ET) NEW YORK (MarketWatch) -- Southern Union Company
SUG, +0.00%
said Friday its 2007 profit totaled $229 million, or $1.75 per share, from $64 million, or 40 per share, in 2006. The results matched the average expectation in a poll of analysts conducted by FactSet. Revenue for the year totaled $2.62 billion, compared with $2.34 billion in 2006. The Houston-based natural gas company didn't provide quarterly data in its financial report. It said its increase in operating results were "primarily attributable to growth in Southern Union's transportation and storage segment and increased contributions from the distribution segment." It said it expects 2008 earnings to come in at $1.80 to $1.90 per share.

Dean Foods to sell shares, reiterates outlook

(7:21 AM ET) NEW YORK (MarketWatch) -- Dean Foods Co.
DF, -1.36%
said Friday that it plans to sell about 18.7 million shares in a registered public offering, expected to close March 5. The offering, which will be underwritten by Lehman Brothers Inc., will increase the diluted shares outstanding by about 13%. The leading U.S. milk producer says it will use proceeds to reduce debt and to fund potential acquisitions or investments. It also reiterated its prior earnings forecast for 15 to 20 cents a share in the first quarter and at least $1.20 a share for 2008. Shares of Dean Foods closed Thursday at $22.99.

Warner Chilcott swings to a gain

(7:11 AM ET) NEW YORK (MarketWatch) -- Warner Chilcott
WCRX
on Friday said fourth-quarter net income climbed to $19.7 million, or 8 cents a share, from a loss of $8.5 million, or 3 cents a share in the year-ago period. Revenue at the St. David's, Bermuda-based pharmaceutical firm rose 10% to $227.7 million after launching two new products, Loestrin 24 FE and Taclonex. Analysts surveyed by Thomson Financial forecast earnings of 26 cents a share and revenue of $219.5 million, on average.

Carustar Industries loss narrows amid flat sales

(6:53 AM ET) LONDON (MarketWatch) -- Caraustar Industries
CSAR
said its fourth-quarter loss narrowed to $6.77 million, or 24 cents a share, from $12.5 million, or 44 cents a share, with sales virtually flat at $203.9 million vs. $203 million. The recycled packaging company said the quarter included 8 cents a share in restructing costs and 4 cents a share in charges related to a customer bankruptcy, as well as a penny gain from discontinued operations. Two analysts polled by FactSet estimated earnings of two cents a share.

Magellan posts higher quarterly profit on 43% revenue growth

(6:49 AM ET) WASHINGTON (MarketWatch) -- Magellan Health Services Inc.
MGLN, -0.16%
reported fourth-quarter net income of $31.3 million, or 78 cents a share, up from $22.5 million, or 58 cents, earned in the final three months of 2006. Quarterly revenue generated by the Avon, Conn.-based specialty health-care management company increased to $658 million from the prior year's $461.3 million. The average of seven analysts surveyed by FactSet Research had been for Magellan to post a profit of 67 cents a share. The company also reiterated that it anticipates revenue for 2008 in a range of $2.53 billion to $2.66 billion and pegged projected earnings at $1.88 to $2.34 a share. The FactSet-derived mean estimate stands at $2.15 a share. Magellan's year-end membership stood at 64.3 million, up from 60.8 million at the end of 2006, results showed.

WPCS lowers 2008 guidance on project delays this quarter

(6:46 AM ET) LONDON (MarketWatch) -- Wireless infrastructure provider WPCS Intl Inc.
WPCS
lowered its guidance for fiscal 2008, saying it now expects earnings of 62 cents instead of 88 cents a share and revenue of $106 million compared to an earlier forecast of $107 million. It forecast earnings of 5 cents a share in the third quarter and 22 cents a share in the fourth quarter. The company said the shortfall in the third quarter was due to significant project delays and not indicative of an overall downturn in its business. The company will release third-quarter results on March 17.

Calpine generates 2007 revenue growth of nearly 15%

(6:36 AM ET) WASHINGTON (MarketWatch) -- Calpine Corp.
C.PN, +0.31%
reported 2007 net income of $2.69 billion, or $5.62 a share, on revenue of $7.97 billion. The operator of electricity-generating plants emerged from Chapter 11 bankruptcy at the end of January, a little more than two years after seeking protection from creditors. For 2006, Calpine had a loss of $1.77 billion, or $3.68 a share, on revenue of $6.94 billion. The number of megawatt-hours generated by Calpine during 2007 rose 9%, results showed. Gross profit for 2007 increased to $895 million from $740 million in 2006.

Iowa Telecom's fourth-quarter profit up on 3% revenue growth

(6:14 AM ET) WASHINGTON (MarketWatch) -- Iowa Telecommunications Services Inc.
IWA
reported fourth-quarter net income of $6 million, or 19 cents a share, up from $3.5 million, or 11 cents, earned in the final three months of 2006. The Newton, Iowa-based communications carrier posted quarterly revenue of $61.4 million, up from the prior year's $59.8 million. The consensus of four analysts surveyed by FactSet Research had been for Iowa Telecom to post a profit of 19 cents a share.

Bayer upgraded to overweight at Lehman Brothers

(5:51 AM ET) LONDON (MarketWatch) -- Lehman Brothers upgraded chemicals and pharmaceuticals manufacturer Bayer AG(DE:575200)
BAYRY, -1.26%
to overweight from equal weight, citing valuation. The broker said Bayer has underperformed the chemicals sector by 11% since mid February on negative headlines abouts its pharmaceuticals unit and a "slightly disappointing" fourth quarter, but Lehman added it believes these events have no material impact on the firm's valuation. "With its attractive earnings outlook and pipeline catalysts, we believe a stock recovery is highly probable," the broker said.

Rank sees underlying profit slide, won't pay dividend

(2:54 AM ET) LONDON (MarketWatch) -- U.K. casino operator Rank Group(UK:RNK)said Friday that its 2007 net profit more than doubled to 311.5 million pounds from 119 million pounds due to disposals, but said trading deteriorated significantly in the second half of the year and it won't pay a dividend. Adjusted operating profit fell 7% to 68.3 million pounds. The group blamed a mix of higher taxes, regulatory changes, the U.K. smoking ban and weakening consumer confidence. It added 2008 will be another challenging year for the company and said it will focus on stabilizing its performance. Separately the group announced plans to transfer its pension plan to a subsidiary of Goldman Sachs and said it expects to receive a cash payment of at least 20 million pounds from the deal.

Swiss Re profit down 9%, takes further write-down

(2:41 AM ET) LONDON (MarketWatch) -- Reinsurance group Swiss Re(CH:001233237)said Friday that its 2007 net profit fell 9% to 4.2 billion Swiss francs ($3.9 billion), while premiums earned rose 7.3% to 31.7 billion Swiss francs. The group booked a further 240 million francs in write-downs from mark-to-market losses on credit default swaps. In November the company revealed a $1.1 billion write-down after insuring a client's portfolio exposed to the U.S. subprime meltdown. The firm said it expects property and casualty markets to remain challenging in the short term and added it won't pursue volume growth. Swiss Re added that January renewal volumes -- which account for over two-thirds of its reinsurance portfolio -- where down 12% from a year ago.

WPP profit climbs 7%, doesn't share 'gloomy' view

(2:30 AM ET) LONDON (MarketWatch) -- U.K. advertising group WPP
WPPGY
(UK:WPP)said its annual profit rose 7% to 515.1 million pounds ($1.02 billion), or 38 pence a share, with revenue up 5% to 6.19 billion pounds. On an adjusted level, earnings per share rose 9.5% to 46 pence a share. Analysts polled by the company expected earnings per share of 44.5 pence on revenue of 6.1 billion pounds. The fastest growth came from Asia Pacific, Latin America, Africa, the Middle East and Central and Eastern Europe; there was "a surprisingly steady speed" in the United States; and a slower speed in Western Europe, the company said. It's lifting its dividend 20% to 13.45 pence a share. The company said based on preliminary January data showing comparable revenue up 5%, it's expecting 2008 to be a better year than 2007, which it acknowledged was against the "gloomy" views of most economic forecasts.

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